I 

115TH CONGRESS 

2D SESSION H. R. 6053 

To prohibit the modification of civil penalties under export control and sanctions laws of the United States with respect to Chinese telecommunication companies. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 8, 2018 

Mr. DEUTCH (for himself and Ms. ROS-LEHTINEN) introduced the following 

bill; which was referred to the Committee on Foreign Affairs 

A BILL 

To prohibit the modification of civil penalties under export 

control and sanctions laws of the United States with 

respect to Chinese telecommunication companies. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Sanctions Viola5 tors Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) In March 2016 Chinese electronics company 

9 Zhongxing Telecommunications Equipment (ZTE) 


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1 was found to have breached United States sanctions 

2 laws by exporting products with American-made 

3 components to Iran in violation of the Export Ad4 ministration Regulations (15 C.F.R. part 730 et 

5 seq.) and the Iranian Transactions and Sanctions 

6 Regulations (31 C.F.R. part 560). 

7 (2) In March 2017 the Department of Com8 merce announced that ZTE also shipped 283 micro9 processors, servers, and routers to North Korea in 

10 violation of United States law. 

11 (3) The Department of Commerce found that 

12 ZTE had knowingly made false statements and mis13 led investigators about its business with Iran and 

14 North Korea, with Secretary of Commerce, Wilbur 

15 L. Ross, Jr., stating, ‘‘The results of this investiga16 tion and the unprecedented penalty reflects ZTE’s 

17 egregious scheme to evade U.S. law and systemati18 cally mislead investigators.’’. 

19 (4) The Department of Commerce found that 

20 ZTE employees had ‘‘destroyed, removed, or sani21 tized all materials concerning transactions or other 

22 activities relating to ZTE’s Iran business that post23 dated March 2012; deleted on a nightly basis all of 

24 the team’s emails to conceal the team’s activities; 

25 and required each of the team members to sign a 


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1 non-disclosure agreement covering the ZTE trans2 actions and activities the team was tasked with hid3 ing.’’. 

4 (5) The Department of Commerce further dis5 closed a 2011 internal ZTE document detailing its 

6 ongoing business in Iran, North Korea, Syria, 

7 Sudan, and Cuba, at the time all listed by the 

8 United States as state sponsors of terrorism and 

9 subject to embargoes. 

10 (6) ZTE plead guilty to the charges and the 

11 Department of Commerce fined ZTE $1.19 billion, 

12 the largest-ever combined civil and criminal penalty. 

13 (7) In announcing the plea and subsequent fine, 

14 Secretary of Commerce, Wilbur L. Ross, Jr., stated, 

15 ‘‘Those who flout our economic sanctions and export 

16 control laws will not go unpunished—they will suffer 

17 the harshest of consequences.’’. 

18 (8) As part of ZTE’s plea agreement with the 

19 United States, ZTE would be subject to a seven-year 

20 suspended denial of export privileges, which could be 

21 quickly activated if any aspect of the deal was not 

22 met. 

23 (9) On April 16, 2018, the Department of Com24 merce announced it had imposed a denial of export 

25 privileges against ZTE due to its determination that 


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1 ‘‘ZTE made false statements to [the Bureau of In2 dustry and Security of the Department of Com3 merce] in 2016, during settlement negotiations, and 

4 2017, during the probationary period, related to sen5 ior employee disciplinary actions the company said it 

6 was taking or had already taken.’’. 

7 (10) In 2012, a report of the Permanent Select 

8 Committee on Intelligence of the House of Rep9 resentatives entitled, ‘‘Investigative Report on the 

10 United States National Security Issues Posed by 

11 Chinese Telecommunication Companies Huawei and 

12 ZTE’’, it was recommended that ‘‘U.S. government 

13 systems, particularly sensitive systems, should not 

14 include Huawei or ZTE equipment, including in 

15 component parts. Similarly, government contrac16 tors—particularly those working on contracts for 

17 sensitive U.S. programs—should exclude ZTE or 

18 Huawei equipment in their systems.’’. 

19 (11) The Federal Bureau of Investigation, in a 

20 February 2015 Counterintelligence Strategy Part21 nership Intelligence Note stated that, ‘‘Chinese Gov22 ernment-supported telecommunications equipment 

23 on U.S. networks may be exploited through Chinese 

24 cyber activity, with China’s intelligence services opVerDate Sep 11 2014 00:54 Jun 12, 2018 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6053.IH H6053

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1 erating as an advanced persistent threat to U.S. net2 works.’’. 

3 SEC. 3. PROHIBITION ON MODIFICATION OF CIVIL PEN4 ALTIES UNDER EXPORT CONTROL AND SANC5 TIONS LAWS WITH RESPECT TO CHINESE 

6 TELECOMMUNICATION COMPANIES. 

7 (a) IN GENERAL.—Notwithstanding any other provi8 sion of law, the President may not modify any civil pen9 alties, including denial orders, implemented by the Gov10 ernment of the United States with respect to a Chinese 

11 telecommunication company pursuant to a determination 

12 that the company has violated an export control or sanc13 tions law of the United States until the date that is 30 

14 days after the President certifies to the appropriate com15 mittees of Congress that— 

16 (1) the company— 

17 (A) is fully cooperating with investigations 

18 conducted by the Government of the United 

19 States, if any, of activities relating to the viola20 tion of the export control or sanctions law of 

21 the United States; and 

22 (B) has not, for a period of at least one 

23 year after the date on which the civil penalties 

24 were imposed, conducted any other activities in 


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1 violation of an export control or sanctions law 

2 of the United States; and 

3 (2) the modification of the civil penalties is in 

4 the vital national security interest of the United 

5 States and the President includes in the certification 

6 a specific and detailed rationale for such modifica7 tion. 

8 (b) APPROPRIATE COMMITTEES OF CONGRESS DE9 FINED.—In this section, the term ‘‘appropriate commit10 tees of Congress’’ means— 

11 (1) the Committee on Banking, Housing, and 

12 Urban Affairs and the Committee on Foreign Rela13 tions of the Senate; and 

14 (2) the Committee on Financial Services and 

15 the Committee on Foreign Affairs of the House of 

16 Representatives. 

Æ 


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